Medical Affairs The Next S-Curve in Pharmaceuticals
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1 Medical Affairs The Next S-Curve in Pharmaceuticals 2004 Pharma, Biotech and Device Colloquium Michael Conway David Quigley
2 OVERVIEW Medical Affairs is increasingly the third major source of differentiation, after R&D and Commercialization, to supplement traditional marketing activities Medical Affairs creates value and competitive advantage by engaging providers and managed care, and expanding development However, companies are finding it challenging to scale up Medical Affairs, while maintaining internal alignment and a coordinated interface to physicians To build a successful Medical Affairs capability, companies must ensure tight collaboration with R&D and Sales & Marketing, build in flawless execution, and attract and keep the right talent 1
3 MEDICAL AFFAIRS IS INCREASINGLY THE THIRD MAJOR COMMERCIAL DRIVER FOR PHARMACOS New external pressures New compliance guidelines are limiting marketing degrees of freedom Increasing demand for outcomes data for payors, and drug comparisons for physicians Medical Affairs Limits of traditional approaches R&D fully leveraged with new products and label expansion Diminishing returns from incremental expansion of sales and marketing tactics 2
4 WIDE RANGE OF APPROACHES TO U.S. MEDICAL AFFAIRS From... To... Reporting Global R&D Dual report to Global and US Interaction with brand teams Interaction with global Budget Support group Light touch global org ensures consistency No separate MA budget Fully integrated with brand teams Fully integrated with Global Marketing Dedicated budget for all activities Focus Tactical support to clinical & commercial Thought partner to brand teams & development group
5 BUT SOME KEY TRENDS EMERGING Reporting Interaction with brand teams Interaction with global Budget Increasing separation from sales and marketing Most struggle to develop integrated solutions and specialization Stronger linkages with enhanced global organizations Increasing MA control over information dissemination budgets Focus Increasingly strategic
6 WIDE RANGE OF SCOPE OF MEDICAL AFFAIRS FUNCTIONS CME Thought Leader Development Drug Information Outcomes Trial Strategy Medical Liaisons Publications Company A Company B Company C Company D Company E 5
7 MEDICAL AFFAIRS CREATES COMPETITIVE ADVANTAGE ON THREE DIMENSIONS Drive appropriate medical use: Educating physicians based on all available data Early and comprehensive engagement of providers: Allowing early consideration by thought leaders Engaging a comprehensive set of stakeholders Peer to peer discussions Involvement in clinical trials Medical education Building a differentiated product profile : Enhancing value of a drug to patients, payors, and physicians, e.g., Product attributes (clinical, cost, convenience, comfort) Efficacy in sub-populations Combinations Direct comparisons 6
8 FOR THESE REASONS SIGNIFICANT GROWTH IS EXPECTED IN MEDICAL AFFAIRS 9,900 1,200 Drug Information 5, , ,000 3, ,000 Medical Service Liaison Marketing/Sales/Reg Affairs Economists/Outcome Researchers Scientists 2001 FTEs 2020 FTEs Source: Professionally Determined Need for Pharmacy Services in 2020 Conference 7
9 COMMON CHALLENGES IN SCALING UP MEDICAL AFFAIRS Consistently interpreting and complying with guidelines Maintaining alignment between Medical Affairs, Commercial and R&D objectives Ensuring interactions with providers are consistent with objectives and with sales and R&D activities Attracting and retaining talented scientists and technical people, particularly mid-level leaders 8
10 POSSIBLE WINNING APPROACH FOR SCALING UP MEDICAL AFFAIRS Balancing the organization tightly around posture Building alignment through a shared vision for the brand that is developed collaboratively with Medical Affairs, R&D, and Sales & Marketing Building processes to drive alignment of activities at a local market level and consistency with objectives Creating a career proposition and trajectory, and ensuring salary commensurate with Commercial 9
11 TOUGH QUESTIONS Are you doing enough in Medical Affairs? How good is the work that is being done? What stops you doing more and doing it better? How excited are your people? How well do you work with R&D and Marketing?
12 11
13 Appendix 12
14 REACHING SATURATION POINT ON TRADITIONAL SALES AND MARKETING Doctor time allocation Percent Administrative tasks Other 100% = ~14 hours per day Time with reps 58 Patient care Prevalence of policies that restrict representative access Percent of physicians Restricts number of reps per day Restricts times or days reps can visit Restricts details to appts./lunch only Have policy 8 80% doctors estimated to have restrictive policies by end of No more than three reps will be seen in a day, and if the doctor is busy, the representative must leave samples with the front desk while the staff obtains the physician s signature. This policy became necessary because there were reps calling on the office and interfering with our ability to see patients. PCP Office Manager 13
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